Liquidity Analysis

Difficulty level: Basic

Liquidity ratios measure the company's ability to meet its short-term obligations.


Ratios (Summary)

General Electric Co., liquidity ratios

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Current ratio 0.94 0.90 0.87 0.77 1.11
Quick ratio 0.57 0.53 0.55 0.46 0.80
Cash ratio 0.33 0.30 0.32 0.19 0.52

Source: Based on data from General Electric Co. Annual Reports

Ratio Description The company
Current ratio A liquidity ratio calculated as current assets divided by current liabilities. General Electric Co.'s current ratio improved from 2012 to 2013 and from 2013 to 2014.
Quick ratio A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. General Electric Co.'s quick ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.
Cash ratio A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. General Electric Co.'s cash ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.

ADVERTISEMENT

Top


Current Ratio

General Electric Co., current ratio calculation, comparison to benchmarks

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Selected Financial Data (USD $ in millions)
Current assets 45,152  42,232  41,750  33,948  41,103 
Current liabilities 47,931  46,947  48,053  44,335  36,876 
Ratio
Current ratio1 0.94 0.90 0.87 0.77 1.11
Benchmarks
Current Ratio, Competitors
3M Co. 1.96 1.70 2.20 2.25 2.01
Honeywell International Inc. 1.50 1.49 1.35 1.31 1.28
Current Ratio, Sector
Diversified Industrials 1.15 1.11 1.08 1.00 1.25
Current Ratio, Industry
Industrials 1.28 1.32 1.30 1.26 1.33

Source: Based on data from General Electric Co. Annual Reports

2014 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 45,152 ÷ 47,931 = 0.94

Ratio Description The company
Current ratio A liquidity ratio calculated as current assets divided by current liabilities. General Electric Co.'s current ratio improved from 2012 to 2013 and from 2013 to 2014.

ADVERTISEMENT

Top


Quick Ratio

General Electric Co., quick ratio calculation, comparison to benchmarks

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Selected Financial Data (USD $ in millions)
Cash and equivalents 15,916  13,682  15,509  8,382  19,241 
Investment securities 84  323  74  18  19 
Current receivables 11,513  10,970  10,872  11,807  10,383 
Total quick assets 27,513  24,975  26,455  20,207  29,643 
Current liabilities 47,931  46,947  48,053  44,335  36,876 
Ratio
Quick ratio1 0.57 0.53 0.55 0.46 0.80
Benchmarks
Quick Ratio, Competitors
3M Co. 1.13 1.01 1.39 1.39 1.33
Honeywell International Inc. 1.01 1.01 0.92 0.89 0.83
Quick Ratio, Sector
Diversified Industrials 0.72 0.68 0.70 0.62 0.87
Quick Ratio, Industry
Industrials 0.74 0.78 0.77 0.74 0.83

Source: Based on data from General Electric Co. Annual Reports

2014 Calculations

1 Quick ratio = Total quick assets ÷ Current liabilities
= 27,513 ÷ 47,931 = 0.57

Ratio Description The company
Quick ratio A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities. General Electric Co.'s quick ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.

ADVERTISEMENT

Top


Cash Ratio

General Electric Co., cash ratio calculation, comparison to benchmarks

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Selected Financial Data (USD $ in millions)
Cash and equivalents 15,916  13,682  15,509  8,382  19,241 
Investment securities 84  323  74  18  19 
Total cash assets 16,000  14,005  15,583  8,400  19,260 
Current liabilities 47,931  46,947  48,053  44,335  36,876 
Ratio
Cash ratio1 0.33 0.30 0.32 0.19 0.52
Benchmarks
Cash Ratio, Competitors
3M Co. 0.42 0.45 0.73 0.68 0.74
Honeywell International Inc. 0.47 0.45 0.36 0.30 0.23
Cash Ratio, Sector
Diversified Industrials 0.37 0.35 0.37 0.25 0.48
Cash Ratio, Industry
Industrials 0.32 0.35 0.35 0.29 0.37

Source: Based on data from General Electric Co. Annual Reports

2014 Calculations

1 Cash ratio = Total cash assets ÷ Current liabilities
= 16,000 ÷ 47,931 = 0.33

Ratio Description The company
Cash ratio A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities. General Electric Co.'s cash ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.

ADVERTISEMENT

Top